EUR/USD Advances for Fifth Straight Session on Softening Fed Expectations

Traders' Opinions

Summary:

The Euro extended its rally against the US Dollar, supported by broad-based Dollar weakness, softer oil prices, and growing expectations that the European Central Bank will raise interest rates again in September. Markets also reduced aggressive Federal Reserve tightening bets, further boosting EUR/USD.

BUY EURUSD

EXP

TRADING

1.15251

Entry Price

1.17800

1.13600

1.15162 -0.00117 -0.10%

0.0

Pips

Flat

1.13600

Exit Price

1.15251

Entry Price

1.17800

The Euro strengthened for a fifth consecutive session on Monday, with EUR/USD climbing to its highest level since mid-June after decisively breaking above the key 1.1460-1.1470 resistance zone. The move was driven by broad US Dollar weakness as traders pared back expectations for aggressive Federal Reserve tightening following a sharp decline in oil prices.

The Greenback came under pressure after US President Donald Trump announced that planned military strikes against Iran would be postponed, citing progress toward a regional peace agreement. At the same time, OPEC+'s decision to increase oil production from September added further downward pressure on crude prices, easing concerns that energy-driven inflation would force the Fed into more aggressive policy action.

The Dollar's rally has largely run its course, arguing that slowing US economic momentum and concerns over the Federal Reserve's ability to contain inflation are likely to weigh on the currency in the coming months.

Additional pressure on the Dollar has come from continued short-covering in the Japanese Yen, while the Euro remains well supported by resilient Eurozone inflation and stronger-than-expected second-quarter economic growth. Those developments have reinforced expectations that the European Central Bank will deliver another interest rate increase in September.

Societe Generale also expects the latest inflation and GDP figures to strengthen the case for further ECB tightening, arguing that resilient growth and persistent price pressures provide policymakers with room to maintain a hawkish stance. Investors now turn their attention to the US ISM Manufacturing PMI for fresh direction on the Dollar and broader market sentiment.

Technical Analysis

EUR/USD Advances for Fifth Straight Session on Softening Fed Expectations_1

EUR/USD has strengthened its bullish outlook after completing a decisive breakout above both the long-term descending trendline and the key 1.1490-1.1500 resistance zone. The breakout marks a significant shift in market structure, with former resistance now acting as a potential support area for any near-term pullback.

Price is currently consolidating above the breakout level, suggesting buyers are defending gains rather than taking aggressive profits. A successful retest of the 1.1490-1.1500 region would reinforce the bullish continuation scenario and provide a stronger foundation for another leg higher.

If bullish momentum persists, EUR/USD is likely to challenge the next resistance area around 1.1600 before extending toward the major supply zone between 1.1780 and 1.1790, as highlighted on the chart. Conversely, a sustained move back below 1.1490 would weaken the immediate bullish structure and expose the pair to a deeper retracement toward the 1.1360 support zone.

Momentum continues to favor the upside. The clean trendline breakout, followed by strong bullish candles and sustained trading above former resistance, indicates buyers remain in control, with dips likely to attract renewed buying interest.

TRADE RECOMMENDATION

BUY EUR/USD

ENTRY PRICE: 1.1525

STOP LOSS: 1.1360

TAKE PROFIT: 1.1780

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education